What is needed is not so much trickle-down as splash-all-over

IF DEHLO represents one pole of modern India, another is the Dhirubhai Ambani Knowledge City, the campus of Reliance Infocomm, just outside Mumbai. For miles before it reaches the City, the approach road is lined with lamp-posts adorned with little posters in Reliance's green-and-blue livery, bearing the slogan: “A New Way of Life”. Public taxis are not allowed beyond the security gates. Thereafter transport is by zero-emission golf buggy, through grass-verged orderliness to concrete-and-glass monuments to modernity.

In one, Reliance Infocomm has a display of its wares: internet cafés, wireless mobile bank cash-machines and, a bit in the future, “home-entertainment” consoles offering television, a DVD library of Bollywood hits (with karaoke option) and broadband internet access. Dhirubhai Ambani, Reliance's founder, who died in 2002, had a vision of affordable communications for the average Indian, with a phone call cheaper than a postcard (and better for the illiterate). Ambani's elder son, Mukesh, oversaw the investment of $3 billion in an 85,000-km (53,000-mile) fibre-optic network covering most of India.

He boasts of turning India from the highest-cost voice market to the cheapest. Of India's 25m mobile-phone customers, a number growing by nearly 2m a month, Reliance already has 6m. Mr Ambani sees this as one of the first pieces of tangible evidence for the common man of the benefits of economic liberalisation. Such a man will have a mobile phone, with cheaper calls than on his old landline or local public phone. Trickle-down has worked, and this is only the beginning. By helping build a world-class digital infrastructure, Reliance, admired and a little feared for its perceived ability to sway government policy, is equipping India to compete in an age when “life will be digital”.

Mr Ambani thinks India is undergoing “a silent revolution: our young people want to fend for themselves, and the government is getting out of their way.” What troubles many is that this revolution is changing the lives of only a small urban section of the population. Even Mr Ambani is worried by the widening social disparities. India, as Nehru wrote 60 years ago, is “a bundle of contradictions held together by strong but invisible threads.” Modernisation and globalisation, far from imposing, as some have feared, a bland sameness on India, are sharpening some of those contradictions.

India has done an astonishing job of containing, in a continent-sized country, the tensions of ethnic, religious, regional, social and economic differences. But success is relative. In the ethnically diverse, non-Hindu north-east, for example, with more than 50 insurgent groups, low-level wars against guerrillas from peoples such as the Nagas and the Bodos have dragged on for decades, and in recent months have spilled over into Bhutan and Myanmar.

Better relations with Pakistan and a lull in the Ayodhya campaign have eased communal tensions, but the casual anti-Muslim attitudes of many Hindus suggest they will resurface soon enough. As Sunil Khilnani has pointed out, the pogrom in Gujarat in 2002 was not an aberration. Rather, it made clear how “economic growth is compatible with extremism”: Gujarat is a prosperous, outward-looking state with a worldwide diaspora; the rioters included well-off doctors and shopkeepers with mobile phones and government-supplied computer print-outs of Muslim addresses.

As in China, partial globalisation is increasing internal regional disparities. A handful of high-growth areas, such as those around Delhi, Mumbai and the southern corridor between Hyderabad and Chennai, are leaving the poorer areas, such as Bihar and Orissa, far behind. Yet the poorer areas' populations are growing faster. Many states are now ruled by parties that have little or no national base. Their leaders—such as Mr Yadav in Bihar, or Chandrababu Naidu in Andhra Pradesh—are elected to do their best not for India, but for their “vote banks”.

Socially, Indian tradition is proving very resilient. Marriage patterns are changing only slowly from intra-caste arrangements. Some ugly traditional traits—a preference for sons, and a willingness to kill the daughters of dowry defaulters—persist even in better-off parts of India. Indeed, the practice of female foeticide, enabled by illegal sex-determining ultrasound scans, is most prevalent in comparatively rich areas, some of which, in Punjab and Haryana, now suffer an acute shortage of girls.

Television, available in about half India's homes, is spreading a shared culture. Amit Khanna, chairman of Reliance's entertainment arm, says it has also “taken the sting out of the tail of socialism” and made people feel less guilty about consuming. But even the growing middle classes, perhaps 150m strong, are torn between the national and global values they see on the screen and the strong ties of their own caste and community.

For much of the urban middle classes, however, India really is shining. Their prospects are improving fast. The challenge is both to make India as a whole richer faster, and to find better ways of distributing the benefits of more rapid growth. As India's population expands, that challenge will become ever more urgent, and ever harder.

Seize the moment

Yet the next few years should offer the Indian government its best chance yet to tackle it. Rarely has India enjoyed such favourable international prospects: of peace with Pakistan; of enhanced integration in the global economy; and of being accepted as an important world power. At home, this is helping generate a new self-confidence which, rightly managed, could produce a virtuous circle of private-sector investment, rapid economic growth and liberalising reform. That in turn might allow a reshaping of the government's budget, and of its role in the economy: as less of an employer, subsidiser and borrower, and more of a provider of the infrastructure, health care and education its people deserve. That is indeed a shining hope.